When you walk into a jewellery store in India, the price you pay is not just the market rate of gold. Several factors like purity, making charges, and government taxes (GST) play a significant role in determining the final invoice amount.
The Formula for Gold Pricing
The standard formula used by most jewellers in India is:
Final Price = (Gold Rate per gram × Weight) + Making Charges + GST (3% on total)
Key Components of the Calculation:
Gold Rate: This is the daily market price of 24K gold, usually quoted per 10 grams. If you are buying 22K gold, the rate is lower (roughly 91.6% of the 24K rate).
Purity (Carat): 24K is considered pure gold. However, jewellery is typically made of 22K or 18K because pure gold is too soft for intricate designs.
Making Charges: These are the labor costs involved in creating the jewellery. In India, making charges can range from 3% to 25% depending on the complexity of the design.
GST: A standard Goods and Services Tax of 3% is applied to the sum of the metal value and making charges.
Example Calculation
Suppose the 24K gold rate is ₹65,000 per 10 grams. You want to buy a 10g chain in 22K with 10% making charges.
Item
Calculation
Amount
22K Gold Rate per Gram
(65,000 / 10) * (22/24)
₹5,958.33
Metal Price (10g)
5,958.33 * 10
₹59,583.33
Making Charges (10%)
59,583.33 * 0.10
₹5,958.33
GST (3%)
(59,583.33 + 5,958.33) * 0.03
₹1,966.25
Total Payable
–
₹67,507.91
function calculateGoldPrice() {
var marketRate10g = parseFloat(document.getElementById('marketRate').value);
var weight = parseFloat(document.getElementById('goldWeight').value);
var purity = parseFloat(document.getElementById('goldPurity').value);
var makingPercent = parseFloat(document.getElementById('makingCharges').value);
if (isNaN(marketRate10g) || isNaN(weight) || isNaN(makingPercent)) {
alert("Please enter valid numeric values for all fields.");
return;
}
// Calculate rate per gram for 24K
var ratePerGram24k = marketRate10g / 10;
// Adjust rate based on purity (Carat)
var adjustedRatePerGram = ratePerGram24k * (purity / 24);
// Metal Value
var metalValue = adjustedRatePerGram * weight;
// Making Charges
var makingValue = metalValue * (makingPercent / 100);
// Subtotal before GST
var subtotal = metalValue + makingValue;
// GST (Standard 3% in India)
var gstValue = subtotal * 0.03;
// Final Total
var finalTotal = subtotal + gstValue;
// Display Results
document.getElementById('resMetalValue').innerText = "₹" + metalValue.toLocaleString('en-IN', {maximumFractionDigits: 2});
document.getElementById('resMakingValue').innerText = "₹" + makingValue.toLocaleString('en-IN', {maximumFractionDigits: 2});
document.getElementById('resGstValue').innerText = "₹" + gstValue.toLocaleString('en-IN', {maximumFractionDigits: 2});
document.getElementById('resTotal').innerText = "₹" + finalTotal.toLocaleString('en-IN', {maximumFractionDigits: 2});
document.getElementById('resultArea').style.display = 'block';
}